ARK Invest-managed fundsbought more a total of 419,324 Coinbase shares for $21.64 million.
Cathy Wood’s firm’s funds allocated the trades as follows:
- the flagship ETF ARK Innovation — 329,773 shares;
- the ARK Next Generation ETF — 53,885 securities;
- TF ARK Fintech Innovation — 35,666 shares.
Together, the exchange’s securities are valued at $647 million. The average purchase price ranged from $243 to $254.
The managers capitalised on the deterioration in market conditions. The stock opened at May’s lows, down 21%, and by the close of the session had trimmed losses to 12.1%, to $51.61.
In the last two days after the filing by the SEC, Coinbase’s market capitalization fell by 20%. About the same losses have been recorded over the past year.
In the suit, the Commission accused Coinbase of violating securities laws. In the agency’s view, a number of tokens on the exchange fit this definition: SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH and NEXO. It followed the Binance lawsuit.
The SEC said that Coinbase illegally combines three functions — acting as broker, exchange and clearinghouse — which are usually separated in traditional markets. The regulator also targeted the Coinbase Earn staking program.
On April 25, the exchange filed a lawsuit to obtain a response from the Commission to its July 2022 inquiry. In it, the company urged clarity in crypto regulation.
The SEC called the firm’s claims baseless. Officials noted that the agency is not obliged to issue new rules, and that the company has no right to sue the regulator.
On May 22, Coinbase filed a new complaint against the SEC to obtain the regulator’s response to the July inquiry.
Subsequently, the U.S. Chamber of Commerce came out in support of Coinbase and accused the regulator of ‘deliberately creating a dangerous and uncertain environment’ for cryptocurrency companies in the country.
On June 6, the platform’s chief legal officer, Paul Grewal, said that the SEC’s regulatory approach is harming the United States’ competitiveness.
Earlier in 2023, the SEC highlighted violations at Bittrex, Coinbase, Kraken, Gemini and Genesis. The CFTC CFTC filed a lawsuit against Binance and its CEO Changpeng Zhao.
ARK Invest resumed buying Coinbase shares in October 2022 after a four‑month pause. The company steadily built up positions in the shares and only in March 2023 disposed of a $13.5 million stake.
At the end of April, Cathy Wood’s funds bought more of the exchange’s securities for $8.6 million. The deal occurred on the same day Coinbase filed its lawsuit regarding the SEC.
In May, ARK Invest-controlled structures invested $8.3 million and$7.5 million in the crypto exchange.